Will the stamp duty cut help to lift the housing market?

Increasing the threshold for thousands of first-time buyers may help to revive property prices if lenders loosen their purse strings

Young couple carrying carpet into their new home. (BreBa/beyond/Corbis)
Homebuyers face fines of up to £5,000 if they try to exploit the new stamp
duty holiday, but accountants are already highlighting “loopholes” in the
system.

In last week’s budget, Alistair Darling doubled the threshold at which stamp
duty starts from £125,000 to £250,000 on residential properties for
first-time-buyers — a saving of up to £2,500. The move was funded by raising
the duty on properties worth more than £1m from 4% to 5%. The two-year
holiday came into effect immediately, while the permanent 5% rate will kick
in from April 2011.

The Treasury has set out strict guidelines governing who will qualify for the
relief and HM Revenue & Customs (HMRC) has said it will use its offshore
powers to weed out buyers who have previously owned property abroad.
However, several grey areas remain.

The chancellor hopes that the measure, first mooted by the Conservatives in
2007, will provide a